Correlation Between Tessenderlo and Campine
Can any of the company-specific risk be diversified away by investing in both Tessenderlo and Campine at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tessenderlo and Campine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tessenderlo and Campine, you can compare the effects of market volatilities on Tessenderlo and Campine and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tessenderlo with a short position of Campine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tessenderlo and Campine.
Diversification Opportunities for Tessenderlo and Campine
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tessenderlo and Campine is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tessenderlo and Campine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campine and Tessenderlo is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tessenderlo are associated (or correlated) with Campine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Campine has no effect on the direction of Tessenderlo i.e., Tessenderlo and Campine go up and down completely randomly.
Pair Corralation between Tessenderlo and Campine
Assuming the 90 days trading horizon Tessenderlo is expected to under-perform the Campine. But the stock apears to be less risky and, when comparing its historical volatility, Tessenderlo is 1.32 times less risky than Campine. The stock trades about -0.03 of its potential returns per unit of risk. The Campine is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,447 in Campine on August 27, 2024 and sell it today you would earn a total of 1,103 from holding Campine or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.42% |
| Values | Daily Returns |
Tessenderlo vs. Campine
Performance |
| Timeline |
| Tessenderlo |
| Campine |
Tessenderlo and Campine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tessenderlo and Campine
The main advantage of trading using opposite Tessenderlo and Campine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tessenderlo position performs unexpectedly, Campine can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Campine will offset losses from the drop in Campine's long position.| Tessenderlo vs. Ackermans Van Haaren | Tessenderlo vs. NV Bekaert SA | Tessenderlo vs. Groep Brussel Lambert | Tessenderlo vs. Tubize Fin |
| Campine vs. Miko NV | Campine vs. Tessenderlo | Campine vs. Van de Velde | Campine vs. EVS Broadcast Equipment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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